Assed v. CreditOne, LLC.Assed v. CreditOne, LLC.
THIS MATTER is before the Court on Defendants Eliza Guglielmo and Guglielmo & Associates’ Motion to Dismiss Counts I and IV of Plaintiff‘s First Amended Complaint (Doc. 31). This case arises from Plaintiff‘s allegation that CreditOne, through counsel Eliza Guglielmo and Guglielmo & Associates (“Defendants“), wrongfully procured a court order garnishing Ms. Assed‘s wages after her ex-husband breached an installment sales contract with Chrysler Capital. Plaintiff asserts in Count I that Defendants “knowingly and deliberately committed fraud in requesting a Writ of Garnishment” against Plaintiff‘s employer and in Count IV that Defendants violated provisions of the Fair Debt Collection Practices Act (“FDCPA“),
Aziza Assed and Yousef Assed married in September 2006 and divorced in September 2017. Doc. 23-1 (“First Amended Complaint,” hereinafter “Complaint“) at 2.1 At some point during their marriage, Yousef Assed entered into a retail installment sales contract with Chrysler Capital on behalf of himself and Ms. Assed. Ms. Assed alleges she was unaware of the contract and Yousef forged her signature when executing it. Id. Apparently Yousef Assed failed to make the required payments, and on October 20, 2016, CreditOne filed a complaint in New Mexico state court for breach of contract. Id. CreditOne‘s attorneys, Eliza Guglielmo and Guglielmo & Associates, prepared the complaint and named Yousef and Aziza Assed as defendants. Id.
On March 10, 2017, Eliza Guglielmo and Guglielmo & Associates moved for default judgment against Yousef Assed only. Doc. 35-1 at 3.2 Five months later, the state court issued a default judgment against Yousef Assed. Id. In March 2019, Ms. Assed asserts the court issued a disposition order against CreditOne for lack of prosecution and dismissed CreditOne‘s claims against Aziza Assed. Doc. 23-1 at 3. In early 2020, CreditOne applied for and obtained a Writ of Garnishment against Yousef Assed to satisfy the judgment. In CreditOne‘s application for the Writ of Garnishment, Eliza Guglielmo and Guglielmo & Associates certified that they had reason to believe, and did believe, that The Gap, Inc. (“The Gap“) held or controlled property belonging to
Ms. Assed asserts “[a]ny due diligence would have shown that [she] had long been divorced from Yousef Assed and that Yousef Assed had no association to The Gap, Inc.” Doc. 23-1 at 3. She further asserts that Defendants Eliza Guglielmo and Guglielmo & Associates fraudulently obtained the Writ of Garnishment against Ms. Assed‘s employer to satisfy the judgment against her ex-husband, Yousef Assed. In sum, Ms. Assed claims Defendants intentionally misrepresented that The Gap owned or controlled property belonging to Yousef Assed, which caused The Gap to garnish her wages to satisfy a judgment that was not against her. Ms. Assed asserts she has “suffered significant financial losses, emotional distress, and damage to her reputation” as a result. Id. at 4.
LEGAL STANDARD FOR MOTION TO DISMISS
To survive a motion to dismiss under
In reviewing a motion to dismiss, the Court must assume all the complaint‘s factual allegations are true, but it is not bound to accept as true legal conclusions, including any “legal conclusion couched as a factual allegation.” Id. at 555 (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)). Accordingly, the Court “should disregard all conclusory statements of law and consider whether the remaining specific factual allegations, if assumed to be true, plausibly suggest the defendant is liable.” Kan. Penn Gaming, LLC v. Collins, 656 F.3d 1210, 1214 (10th Cir. 2011). In deciding whether the plaintiff‘s stated claim for relief is adequate, the Court views “the totality of the circumstances as alleged in the complaint in the light most favorable to [the plaintiff].” Jones v. Hunt, 410 F.3d 1221, 1229 (10th Cir. 2005). The essential question is whether the plaintiff has nudged her claim “across the line from conceivable to plausible.” Twombly, 550 U.S. at 570.
DISCUSSION
Defendants Eliza Guglielmo and Guglielmo & Associates move to dismiss two claims. First, Defendants argue Ms. Assed failed to state a fraud claim against Eliza Guglielmo and Guglielmo & Associates in Count I with sufficient specificity. Second, Defendants argue Ms. Assed‘s FDCPA claim is time-barred under the statute-of-limitations. The Court addresses each argument in turn.
I. Ms. Assed stated a plausible fraud claim against Defendants.
In Count I, Ms. Assed claims Defendants “knowingly and deliberately committed fraud in requesting and obtaining a Writ of Garnishment against The Gap., Inc. under the false pretense that it was for the judgment debtor Yousef Assed, when [they] knew the entity being garnished had nothing to do with Yousef Assed, but was instead the employer of Plaintiff.” Doc. 23-1 at 4.
To maintain an action for fraud, a Plaintiff must show:
(1) a misrepresentation of fact, (2) either knowledge of the falsity of the representation or recklessness on the part of the party making the misrepresentation, (3) intent to deceive and to induce reliance on the misrepresentation, and (4) detrimental reliance on the misrepresentation.
Williams v. Stewart, 2005–NMCA–061, ¶ 34, 137 N.M. 420.3 Furthermore, when asserting a fraud claim in federal court, “a party must state with particularity the circumstances constituting fraud or mistake.”
First, Ms. Assed plausibly alleges a misrepresentation of fact that satisfies the first element of fraud. Ms. Assed asserts Defendants made two false representations when filing their application for a Writ of Garnishment against Yousef Assed on behalf of CreditOne. First, Ms. Assed claims Defendants included her name under the “Defendant” heading in the case caption on CreditOne‘s Writ of Garnishment application even though CreditOne‘s claims against her were
Doc. 35-2. Moreover, Ms. Assed asserts “[a]ny due diligence would have shown that Aziza Assed had long been divorced from Yousef Assed and that Yousef Assed had no association to The Gap, Inc.” Doc. 23-1 at 3. Taking as true Ms. Assed‘s factual allegation that Yousef Assed was never employed by and otherwise had no connection to The Gap, it is plausible to conclude Defendants had no reason to believe, or did not believe, that The Gap controlled Yousef Assed‘s money or property. Defendants’ certification in paragraph 8 of the application would therefore be a misrepresentation of fact and the first element of fraud is plausibly pleaded.
Second, it is plausible to conclude Defendants acted recklessly in certifying they had reason to believe The Gap held or controlled Yousef Assed‘s money or property. “Recklessness is the intentional doing of an act with utter indifference to the consequences.” Baldonado v. El Paso Natural Gas Co., 2008-NMSC-005, ¶ 37, 143 N.M. 297. Ms. Assed‘s allegations suggest Defendants certified to a court, in an application to garnish wages, that they had a basis to believe The Gap held Yousef Assed‘s money or property. Ms. Assed‘s complaint also asserts that a simple records check would reveal Yousef Assed never worked at The Gap and instead it was Ms. Assed who worked there. Doc. 23-1 at 4. There is no dispute that Defendants acted intentionally by filing an application for a Writ of Garnishment against Yousef Assed. See Doc. 35-2. The factual allegations in Ms. Assed‘s complaint further suggest Defendants acted with utter indifference either by: (1) performing no investigation into Yousef Assed‘s connection to The Gap whatsoever; or (2) intentionally attempting to recover Yousef Assed‘s debt from Ms. Assed‘s employer. In either case, Ms. Assed alleges facts sufficient to plausibly suggest Defendants acted recklessly in certifying they had reason to believe The Gap was an appropriate garnishee for Yousef Assed‘s debt, and the second element of fraud is plausibly pleaded.
Third, Ms. Assed‘s allegations are sufficient to support an inference that Defendants intended to deceive and induce reliance on their misrepresentation. Ms. Assed asserts that Defendants are attorneys specializing in the collection of consumer debts who are regularly engaged by creditors to collect debts owed in court. Doc. 23-1. Defendants represented CreditOne in the underlying state court lawsuit to collect Yousef Assed‘s debt. As such, Defendants were incentivized to obtain a court order to garnish wages to satisfy Yousef Assed‘s debt. It is undisputed that Defendants intentionally applied for a Writ of Garnishment and intended that the court rely on their representations in the application to issue a writ. Ms. Asssed further theorizes Defendants intentionally or recklessly misrepresented they had a basis to believe The Gap held or controlled Yousef Assed‘s money. While Ms. Assed does not present specific facts indicating Defendants had actual knowledge Yousef Assed was unaffiliated with The Gap, she does assert
Fourth, Ms. Assed plausibly alleges the state court relied upon Defendants’ misrepresentation to Ms. Assed‘s detriment. “[T]o recover in fraud, [p]laintiffs must establish that they suffered damages that were proximately caused by justifiable reliance on [Defendants‘] misrepresentation . . .” Cain v. Champion Window Co. of Albuquerque, LLC, 2007-NMCA-085, ¶ 22, 142 N.M. 216. Defendants allegedly misrepresented that The Gap held or controlled Yousef Assed‘s wages. Based upon that misrepresentation, the New Mexico court issued a Writ of Garnishment. Doc. 23-1 at 4. As a result of the writ‘s issuance, Ms. Assed asserts her wages were withheld by The Gap and diverted to CreditOne “in an amount to be proved at trial.” Doc. 23-1. at 5-6. She further asserts she “suffered significant financial losses, emotional distress, and damage to her reputation.” Id. at 4. Taking as true Ms. Assed‘s factual representations, she has plausibly alleged the fourth element of fraud.
Finally, Ms. Assed‘s claim satisfies the heightened pleading standard imposed by Rule 9(b). The Tenth Circuit requires that fraud claims “set forth the time, place and contents of the false representation, the identity of the party making the false statements and the consequences thereof.” Koch, 203 F.3d at 1236. Ms. Assed‘s Complaint alleges Defendants Eliza Guglielmo and Guglielmo & Associates falsely represented that they had reason to believe The Gap held money or property belonging to Yousef Assed on CreditOne‘s application for a Writ of Garnishment. Ms.
For the foregoing reasons, Ms. Assed has stated a plausible fraud claim against Defendants. Although Ms. Assed does not plead specific knowledge of Defendants’ intent to deceive, a plaintiff need not establish every element of a prima facie case in her complaint to survive a
II. Ms. Assed‘s FDCPA claim is time-barred.
In Count IV, Ms. Assed asserts Defendants violated the FDCPA by obtaining a Writ of Garnishment from her employer to satisfy the judgment against Yousef Assed. Specifically, Ms. Assed claims Defendants made a “false, deceptive or misleading representation” to collect Yousef Assed‘s debt, used a “business, company, or organization name other than the true name of the debt collector‘s business, company, or organization, and collected money not “expressly authorized by the agreement creating the debt.”
Defendants move to dismiss Ms. Assed‘s FDCPA claim solely on the basis that it is time-barred under § 1692(k). The Court agrees.
The FDCPA has a one-year statute of limitations:
An action to enforce any liability created by this subchapter may be brought in any appropriate United States district court without regard to the amount in controversy,
or in any other court of competent jurisdiction, within one year from the date on which the violation occurs.
Ms. Assed failed to plead with sufficient factual specificity that Defendants’ alleged FDCPA violations occurred within the one-year statute-of-limitations. According to the Complaint, Defendants wrongfully obtained a Writ of Garnishment against Ms. Assed‘s employer on February 18, 2020. Doc. 23-1 at 3. Although Ms. Assed asserts she has “suffered significant financial losses, emotional distress, and damage to her reputation” after the Writ was issued, she set forth no specific dates in which her wages were garnished or Defendants otherwise violated the FDCPA. In fact, February 18, 2020 is the latest date Ms. Assed specifically referenced in her Complaint. Ms. Assed did not file her initial complaint in New Mexico state court until August 25, 2021—more than four months after the FDCPA statute-of-limitations had run. Doc. 1-1.
Ms. Assed‘s assertion in her response to Defendants’ Motion to Dismiss that the Writ of Garnishment was first served in August 2021 and that her wages were garnished thereafter cannot save her deficient Complaint. The Court may only consider the sufficiency of Plaintiff‘s allegations “within the four corners of the complaint” when ruling on a
CONCLUSION
For the reasons stated in this Opinion, Ms. Assed has alleged a plausible claim for relief against Defendants in Count I and failed to state a claim against Defendants in Count IV. Accordingly, Defendants’ Motion to Dismiss Counts I and IV of Plaintiff‘s First Amended Complaint is GRANTED IN PART and DENIED IN PART.
- Defendants’ Motion to Dismiss claims asserted against Eliza Guglielmo and Guglielmo & Associates in Count I is DENIED.
- Defendants’ Motion to Dismiss claims asserted against Eliza Guglielmo and Guglielmo & Associates in Count IV is GRANTED.
IT IS SO ORDERED.
WILLIAM P. JOHNSON
CHIEF UNITED STATES DISTRICT JUDGE